The 12.07% Holiday Pay Rule
Why 12.07%, when it applies, and how to use it correctly.
Where 12.07% comes from
The statutory minimum annual leave in the UK is 5.6 weeks. A working year is 52 weeks. So the worker is at work for 52 − 5.6 = 46.4 weeks. The ratio of leave to working time is:
5.6 ÷ 46.4 = 0.1207 = 12.07%
That means for every hour of work, the worker is also accruing 0.1207 hours of paid leave. Over a full year, the total works out the same as 5.6 weeks of leave on the worker's normal pattern.
Mid-year joiner, leaver, or above-statutory entitlement
Your entitlement
28 days(210 hours)
Annual entitlement. Statutory minimum is 28 days.
5 days per week × 5.6 weeks (statutory minimum) = 28 days per year Your contract treats bank holidays as part of this total — book them as you would any other day off.
When it applies
Since 1 April 2024 the 12.07% method is the lawful way to calculate leave accrual for:
- Irregular-hours workers — including most zero-hours contracts and casual workers.
- Part-year workers — including term-time-only staff in schools, seasonal workers, and Christmas casuals.
It does not apply to regular full-time or part-time workers. For them, leave is 5.6 × days-per-week (capped at 28).
Worked examples
Zero-hours worker
Worked 200 hours so far this leave year. Holiday accrued = 200 × 0.1207 = 24.14 hours.
Term-time worker (post-2024)
39 weeks at 25 hours/week = 975 hours worked. Holiday accrued = 975 × 0.1207 = 117.68 hours.
Rolled-up pay on £12/hr
100 hours × £12 = £1,200 basic pay. Rolled-up holiday pay = £1,200 × 12.07% = £144.84 (itemised separately on the payslip).
Frequently asked questions
Who counts as an irregular-hours worker?+
Anyone whose paid hours are wholly or mostly variable from one week to the next under their contract. This includes most zero-hours workers, casual workers, and shift workers without a fixed pattern.
How is the accrual added up?+
Each pay period, multiply the hours worked by 0.1207. The result is hours of paid holiday accrued for that period. Total it up over the leave year for the worker's running balance.
Can rolled-up holiday pay replace booked time off?+
Yes for irregular-hours and part-year workers, post-April 2024. The 12.07% uplift is paid on each payslip and the worker takes time off without further payment. The uplift must be itemised separately on the payslip.
What if I work some regular hours and some irregular hours?+
Mixed working patterns are common but legally awkward. The safer default is to treat the worker as regular if they have a contractual normal pattern, and only fall back to 12.07% accrual when hours are genuinely unpredictable. Take advice if in doubt.